Lloyds Bank announces Bitcoin ban over debt fears

The British largest mortgage lender Lloyds Banking Group said on Sunday it would ban credit card holders from buying cryptocurrencies following the example of U.S. bank giants JPMorgan Chase and Citigroup.

According to a Lloyds spokeswoman, the move is aimed at protecting customers from running up huge debts from buying virtual currencies on credit, if their values were to plummet.

"Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies", a spokesman said.

Concerns have been rising among credit card providers as their customers have increasingly been using credit cards to fund accounts on online exchanges, which are then used to purchase the digital currencies.

REUTERS/Benoit TessierMajor banking groups in the United States and United Kingdom no longer allows the purchase of cryptocurrencies using credit cards.

At the time, Bitcoin was rising sharply in value, hitting a peak of $19,187 on 16 December on the Luxembourg-based Bitstamp exchange. Other leading British banks, such as Barclays and HSBC, have not responded to request for comment on whether they are authorizing purchases of cryptocurrencies with credit cards and whether they have plans to change their policies.

The same publication reported that a company memo from Bank of America confirmed that the ban on purchasing crypto money covers all of the personal and business credit cards that the corporation issues.

But since then, the value of the largest and most popular cryptocurrency has experienced a sharp downturn and this week fell below 7,700 Dollars.

Both Bank of America and Citigroup applied the new policy last Friday while JPMorgan followed on Saturday.

The three banks namely, Bank of America, JP Morgan Chase, and Citigroup each confirmed that they were halting transactions involving digital currency with their credit cards, although Bank of America spokesperson said that customers can still use their debit cards for that objective. Banks have also found it hard to monitor cryptocurrencies, which are required to look out for signs of money laundering.

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